What is it?
Also known as comparable market analysis is the most important tool in real estate. It’s the absolute best method available to learn the value of your home based on factual data. It helps you determine if the home you want to buy is overpriced.
Best of all it’s FREE. So don’t be fooled by realtors advertising free CMA!
How a CMA is Determined?
You will need to find at least three comparable properties that have recently sold. Below is a list of criteria for finding a comparable property.
- Style/type: Can’t compare a condo with a home or multi family unit. If it’s a 2 story home look at 2 story comparables.
- Location: The closer the better. Location is everything in real estate.
- Sale Date: The more recent the better. Try to stay within 3-6 months.
- Size: Stay within a few hundred square feet.
- Age: Keep the timeframes close. Don’t compare a home built in 1910 with one built in 2009.
- Features: Garage, kitchen, bedrooms, finished basements/attics, etc.
- Condition: Has it been renovated? Is it a fixer upper?
- Lot size: A home that has several acres cannot be compared with a home that has no land in the city.
Evaluate Comparables
Go drive by some of the comparable properties and size them up with your home. Consider and takes notes on some of the criteria below:
- Overall Exterior Condition: Paint, what needs repairs?
- The Lot: Landscaping, size, style (wooded, useable, etc.)
- Neighboring properties: Is this house the nicest on the block?
- Traffic and noise levels
- Curb Appeal: What was your first impression of this property?
Look at the Numbers
Once you have your three comparables it’s time to look at the factual data from these homes. Evaluating this carefully will help you determine your price and the amount of time to expect it to be on the market.
- What is the price per square foot? High? Low?
- How long were these homes on the market?
- Were there any price reductions?
- What time of the year was the home sold?
